Correlation Between Growth Strategy and Baird Short
Can any of the company-specific risk be diversified away by investing in both Growth Strategy and Baird Short at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Growth Strategy and Baird Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Strategy Fund and Baird Short Term Bond, you can compare the effects of market volatilities on Growth Strategy and Baird Short and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Growth Strategy with a short position of Baird Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Strategy and Baird Short.
Diversification Opportunities for Growth Strategy and Baird Short
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Growth and Baird is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Growth Strategy Fund and Baird Short Term Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Short Term and Growth Strategy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Growth Strategy Fund are associated (or correlated) with Baird Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Short Term has no effect on the direction of Growth Strategy i.e., Growth Strategy and Baird Short go up and down completely randomly.
Pair Corralation between Growth Strategy and Baird Short
Assuming the 90 days horizon Growth Strategy Fund is expected to generate 6.64 times more return on investment than Baird Short. However, Growth Strategy is 6.64 times more volatile than Baird Short Term Bond. It trades about 0.05 of its potential returns per unit of risk. Baird Short Term Bond is currently generating about 0.22 per unit of risk. If you would invest 1,294 in Growth Strategy Fund on October 20, 2024 and sell it today you would earn a total of 8.00 from holding Growth Strategy Fund or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Strategy Fund vs. Baird Short Term Bond
Performance |
| Timeline |
| Growth Strategy |
| Baird Short Term |
Growth Strategy and Baird Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Strategy and Baird Short
The main advantage of trading using opposite Growth Strategy and Baird Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Strategy position performs unexpectedly, Baird Short can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Baird Short will offset losses from the drop in Baird Short's long position.| Growth Strategy vs. Baird Short Term Bond | Growth Strategy vs. Siit Ultra Short | Growth Strategy vs. Prudential Short Duration | Growth Strategy vs. Chartwell Short Duration |
| Baird Short vs. Western Asset E | Baird Short vs. Blackrock Bd Fd | Baird Short vs. Baird Aggregate Bond | Baird Short vs. Champlain Mid Cap |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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